Understand Your Net Worth Calculation
Net worth is a measure of how much wealth or value you have. It is calculated by subtracting the amount of money you owe (liabilities) from the value of what you own (assets). So, it’s not just the amount of cash you have, but it also takes into account other valuable things you own such as property, investments and possessions.
Having a high net worth means you have more assets than liabilities. It’s important to keep in mind that having a lot of cash on hand doesn’t necessarily mean you have a high net worth if you have a lot of debts to pay off.
For example, if you have a lot of credit card debt and car payments, it can be easy to think that you’re still building savings if you have money in your bank account. However, these debts are actually liabilities that are reducing your net worth.
To avoid becoming overconfident in your finances, it’s important to track both your assets and liabilities and ensure that you’re consistently reducing your debts. You should prioritize paying off high-interest debts like credit card balances and car loans before focusing on building up savings. This will help you increase your net worth and achieve long-term financial stability.
Go to the HorseGrooms Community to learn how make a budgeting plan.
Emmy Sobieski’s article doesn’t stop with this; it continues (and even in more depth) within the HorseGrooms Community. All you have to do is set up a free profile in the HorseGrooms Community, and you’ll gain exclusive access to special resources, opportunities, courses, and more.
This is NOT financial, legal, tax, or investment advice.
This article is for educational purposes only. It is not advice. Why isn’t it advice? First, I don’t have the licenses necessary to advise you. Second, I don’t know your specific situation, which I would need to know in order to advise you (if I had the licenses, which I do not).
Whenever someone gives you advice, ask yourself these two questions above: Do they have the credentials, and do they know your specifics? If either answer is no, treat their advice like a starting point of learning and not as advice.
Let these blogs serve as a starting point in your education, not an end answer. Only you can find your answers to your specific situation.
I love this horse community, especially the parts that come together to celebrate the majesty and generosity of the spirit of horses. I want to provide a starting point for you to learn and empower yourself with financial knowledge, and map your perfect journey through life.
My career: 32+ years as an institutional investor, specializing in technology stocks, corporate, and startup operations. I am an advisor and investor in public companies and private companies; authored the #1 Amazon Bestselling book $100M Careers: the 5 Fastest Paths to Wealth Beyond Your Wildest Dreams; am a financial coach through my $100M Career Amplifier program; have managed multi-million and worked on multi-billion funds; and have been a keynote and guest speaker for many events and podcasts, covering everything from careers, leverage, operations, and technology.
You can learn more on my LinkedIn page or my website.
